Early in my career, I was lucky enough to work alongside two extraordinary sales leaders: Jim Herbold at Box and Brian Millham at Salesforce. Jim was Box’s first sales hire, employee #7, and took the company from $0 to $100M in ARR. Brian started as Salesforce’s 2nd salesperson and is still there… 20 years later. Both leaders were wildly successful not just because of the company they joined, but because they quickly learned how to speak the language of their CEO.
Sales is a people business, and every employee must feel like they are a part of the company, and part of the culture.
President at Salesforce
Speaking the same language as your boss isn’t as simple as it may sound. Even the most experienced founders can struggle to hire their first Head of Sales. Without a proper go-to-market strategy and the right sales leadership to execute against that strategy, even the best products are forgotten as well-funded competitors capitalize on your mistakes.
Why hire a VP of Sales?
Your first VP of Sales isn’t just a money maker: they’ll fundamentally shift your company’s culture for the better.
Traditionally, sales departments have been siloed from the rest of the company. I’ve seen dozens of teams celebrating at the end of the quarter, popping champagne or expensing steak dinners while the rest of the company – engineering, customer success, finance – are still working in the office.
It’s not just massive parties at the end of the quarter: sales can separate themselves in small ways too. Between separate offices, different perks, or jargon that reinforces their prestige, companies have intentionally siloed sales teams from the rest of the company for years. It’s no surprise that iconic business movies – Glengarry Glenn Ross, Boiler Room, and Wolf of Wall Street – all glorify stereotypical salespeople as part of a separate species.
The “sales leader” stereotype couldn’t be further from the truth. Sales is a central part of today’s most successful organizations. By allowing your new VP of Sales to address problems and encourage transparency across your entire company, they’ll be able to proactively fix problems that appear as missed sales targets or churned customers months later.
For example, they’ll be able to help your marketing team identify which field events are driving leads, or sit with your customer success team to identify cohorts of companies that might be at risk of churning. Anytime revenue slumps, an effective VP of Sales becomes a mechanic – quickly identifying and solving the problem, regardless of whose fault it is or where it appears in the car.
When’s the right time?
Timing your first VP of Sales hire is a balancing act.
If you’re too late, you’ll drown in a swamp of bad data and rogue processes. Individual salespeople will build their own systems to close deals. Without a centralized process for organizing your customer data, you’ll find it impossible to scale or onboard new teammates.
If you’re too early, your VP will go on a hiring spree. Without enough prospects coming through your funnel or deals to close, your sales leader will flail and focus on hiring as a crutch to justify their hiring. If you find yourself here, encourage your new sales hire to get on the phone and close a few deals. It’s the quickest way for them to learn and ultimately decide on the best steps for your business.
You’re ready to hire your first VP of Sales when you have:
- 2-4 sales or business development representatives (SDRs/BDRs), who spend their time looking for prospective clients.
- 2-6 sales representatives in place, who spend their time closing prospects sourced by the SDR/BDRs.
- $1-2M+ in ARR, proving your product-market fit.
You should expect your new VP to build an operating plan for your sales team. They’ll build a bottoms-up model for how many sales representatives and SDR/BDRs they’ll need based on a revenue target identified by you or your company’s board.
Who is the right VP of Sales for you?
The easiest way to find the wrong VP of Sales is to look for them. No matter how great a sales leader has been at another company, he or she may not be the right candidate for you.
At the end of the day, you should optimize for the sales leader that can communicate effectively with your CEO. When a sales head and CEO speak different business languages, the partnership is doomed from the start. They won’t understand each other. As a result, no one else in the company will understand what’s going on.
This is easier said than done. For practical matters, CEOs of early stage businesses must have a sales VP who speaks the same business language as the CEO. Bigger companies, however, may have a CRO or sales operations leader who can act as a translator between the two, making sure they’re always on the same page.
Generally, sales leaders have at least one of four “superpowers.” The Sales Superpowers are:
These sales leaders excel at “managing up.” In other words, they can clearly demonstrate strategic thinking backed by data. These sales leaders are Excel addicts, digging through your CRM to hypothesize about the market, define possible opportunities, and then test their hypotheses.
Process managers love lists and planning documents. They dream in Quip docs. These sales leaders love planning for edge cases. As you scale, their organization will be key in helping set company norms and streamlining processes at every corner.
Vocal, customer-facing, and big personalities – these sales leaders can have an outsized impact on any organization as a whole, leading the charge as Sales integrates itself into every part of the organization. These culture managers can both follow an operating plan and bring a rolodex of experienced representatives who follow them from company to company.
Deal managers are addicted to sales. They can recite every detail about the top deals in their pipeline off the top of their head. They can clearly walk through what steps need to be taken, and by whom, to get the deal closed. They love to eat dinners with clients. If your sales representatives were a football team, they’d be the quarterback.
Most sales leaders will have one primary superpower that they naturally align with, and a secondary superpower that they’ve worked on developing. Forcing a different superpower on a VP of Sales would be like taking wedding photos with an iPad. Sure, you could do it, but there are far better tools available.
So the question becomes: which strength do you need the most?
Pick a sales leader whose primary superpower is the same as the CEO’s, and whose secondary superpower aligns with what the company most desperately needs. Your sales leader’s relationship with your CEO is essential for them to thrive in the role. Even the most productive sales leader will fail if they can’t natively communicate with the CEO.
Determining which of these four archetypes fits your founding team is relatively straightforward:
Learn the four Sales Superpowers.
Review the four superpowers with your CEO – or if you’re the CEO, review them yourself. Rank them from order of “most essential” to “least essential” based on what you need from your sales leadership.
Codify your CEO’s Superpower.
Tease out your CEO’s Superpower. Ask whether they're more focused on closing deals or building company culture, or whether they'd rather see a detailed Excel model or a list of potential deals that their teams are focusing on. It might be difficult to decide, knowing that all of these strengths are objectively important. Still, push them to decide. “If you absolutely had to pick between closing deals or hosting a company offsite, which excites you the most?”
Determine which Superpower your company desperately needs.
The same line of questions applies, this time focused on what’s best company. Every sales department at a company should have someone in the leadership who idealizes each superpower – likely, there’s a hole in your current team that this new sales leader could fill.
Go find someone to match your Superpower.
Your new VP of Sales’ superpower should align most closely with your CEO’s. At the end of the day, even a sub-optimally aligned sales leader that can communicate effectively with your CEO will be more successful than the opposite.
For early stage companies, it’s hard to have a single person focused on acting out each superpower. Ideally, your new VP of Sales will align most closely with your CEO, and have a secondary superpower to solve your startup’s most dire startup sales problem. Realistically, it’s more effective to empower your new sales leader to hire others to fill your company’s needs with their own superpowers than expect your VP of Sales to solve every problem themselves.
For more established companies, you have another option. You can hire a sales leader whose superpower most aligns with what the company needs, and another executive to serve as a “translator” between them and your CEO. This Chief Revenue Officer (CRO) will work to take information from your VP of Sales and translate it into a more digestible form for your CEO.
How do you find your VP of Sales?
Start reaching out to your network, asking for references that fit your specific ideal VP of Sales. Avoid asking for “any good salespeople” – the last thing you want to do is waste a qualified candidate’s time if their personality or strengths don’t fit the role.
When you bring candidates in for interviews, ask them to rank themselves on these four strengths. Talk about specific instances in which they’ve had a chance to put those strengths to the test, and how they went about it. Look for honesty and transparency in their answers.
In time, this process becomes effortless. I go through it with many of the companies in our portfolio at Emergence Capital as I help them get their sales operations up and running. When meeting a candidate, I can generally assess within 15 minutes which of the strengths they have.
Of course, as part of their interviews, you can and should be digging deeper into their background. As you consider people with the right strengths, consider their specific experience, salesmanship style, ability to executive, and emotional intelligence.
Help your recruiters learn this process. By the time a CEO walks into an interview, the pool of candidates should be whittled down to the few who fit what the company and executive team needs – not what hiring managers or the CEO think a stereotypical sales leader should be.
Hiring is like woodworking: measure twice, cut once.
How do you close your perfect VP of Sales?
Once you’ve decided on a candidate, your immediate impulse might be to email an offer letter and comp package… and hope they accept.
That might work...
... but there are more effective ways to close a candidate.
First things first: ask the candidate if they’re ready to accept the offer. Interviews are two-way streets, and your candidate might still have lingering questions that you can address.
Does the candidate have a significant other? Offer to take them both out to dinner, even if they’ve already accepted your offer. Get to know them. Your candidate’s employment affects their entire family.
Explain the full scope of the role. Great sales leaders are drawn to companies poised to grow and opportunities to build and scale the entire sales organization, capitalizing on the product-market fit that’s already in place.
After the candidate decides they’re ready to accept, make the offer in person. Talk about their compensation up front. Take the time to explain their equity package, including what their financial upside will look like based on a variety of exit valuations.
Compensation for a VP of Sales is relatively straightforward. For startups with <$20M in ARR between Series A and C, expect to pay (according to a 2018 Betts Recruiting report):
- San Francisco: $180-$250k base + $360-$500k OTE.
- New York: $180-$250k base + $360-$500k OTE.
- Austin: $140-$200k base + $280-$400k OTE.
- Chicago: $180-250k base + $360-$500k OTE.
A great Sales VP is worth their weight in gold.
Your work isn’t done until the candidate shows up for their first day. Continue to engage with your new team-member as they transition out of their current role. Leaving a role is stressful. Make your new team member feel at ease with consistent touch points, whether that’s a welcome email from the team or “pre-work” logistics work like getting their office preferences.
How do you onboard your new VP of Sales?
Apart from some housekeeping – setting up their laptop, office, and insurance – you need to brain dump. Schedule long meetings for your new VP of Sales with the CEO and Head of Product, with the explicit purpose of bringing them up to speed with everything product related.
Some useful questions to frame the conversation:
- What research went into each of the product’s features?
- What does the product roadmap look like? How is the engineering team organized, and how are they prioritizing features and bugs?
- Where does the product currently fail?
- Who are your current biggest customers?
- What engineering, marketing, and financial resources are available to the Sales VP?
Your Sales VP should also sit with members of your board, customers, your Customer Support team, and the marketing team to cover:
- Who is the ideal customer? Why?
- Why does your ideal customer buy your product?
- Why is this market poised to explode? Why is this urgently important?
With this information, your new VP of Sales should be able to demo and pitch your product without thinking. Most sales reps want to learn from someone who can do, not just teach.
Lastly, you’ll also need to organize some metrics: ACV, pipeline volume (how many leads you currently get), your pipeline conversion rate (how many leads convert into customers), your current sales cycle (from when a prospect enters your funnel to a sale), and how long it takes a new sales representative to become fully productive
How do you track their success?
Give your new sales lead room to succeed. Offer consistent feedback. Give them the resources and tools they’ll need to thrive in the role.
But… if your sales numbers aren’t good through multiple quarters, schedule an honest retrospective to identify the problems. Obvious product issues? Fix them. Resources tight? Re-allocate them to where they need to be.
If it’s increasingly clear that you’ve got the wrong people in place, let them go. Not only will you continue to miss sales targets, but they’ll drag the rest of the company – engineering, customer support, marketing – down with them. Don’t be afraid to fire.
It’s better for everyone involved to part ways quickly, instead of hanging on to unrealistic dreams that it’s going to get better.
President at Y Combinator
Finding the right VP of Sales is too important to get wrong. The headache of hiring a new sales leader is nothing to the migraine of losing your company.
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